Published: Friday, 30 Oct 2009 | 7:58 AM ET

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Internal investigations into the conduct of several House members have been exposed in an extraordinary, Internet-era breach of security involving the secretive process by which Congress polices lawmaker ethics.

Jonathan D. Colman

Revelations of the mostly preliminary inquiries by the House Committee on Standards of Official Conduct — also known as the Ethics committee — shook the chamber as lawmakers were immersed in a series of scheduled votes Thursday.

The panel announced that it was probing two California Democrats — Reps. Maxine Waters and Laura Richardson — even as its embarrassed leaders took pains to explain that several other lawmakers also identified in the leaked confidential committee memo may have committed no wrongdoing.

The committee said it was investigating whether Waters used her influence to help a bank in which her husband owned stock, and whether the couple benefited as a result. Separately, the panel is looking into whether Richardson failed to disclose required information on her financial disclosure forms and received special treatment from a lender.

In the midst of a busy legislative day, ethics chairwoman Rep. Zoe Lofgren, D-Calif., went to the House floor to announce that a confidential weekly report of the committee from July had leaked out in a case of "cyber-hacking."

A committee statement said that its security was breached through "peer to peer file sharing software" by a junior employee who was working from home. The staff member was fired.

The July report contains a summary of the committee's work at the time, but Lofgren said no inferences should be made about anyone whose name is mentioned.

The committee typically makes a public announcement about its activities only when it begins an investigation of potential rule-breaking, which is conducted by an investigative subcommittee whose members also are made public.

However, the weekly reports include a summary of the committee's work at an earlier stage, when its members and staff scrutinize lawmakers to see whether an investigation is warranted.

The Washington Post reported in its online edition Thursday that the document was disclosed on a publicly accessible computer network and made available to the newspaper by a source familiar with such networks.

The Post reported that nearly half the members of the House Appropriations defense subcommittee were under scrutiny.

The previously disclosed inquiry involves lawmakers who steered appropriations to clients of a now-defunct lobbying firm and received campaign contributions from the firm and its clients.

The names included three lawmakers previously identified in the inquiry: the chairman of the defense subcommittee, Rep. John Murtha, D-Pa.; and Reps. Peter Visclosky, D-Ind., and James Moran, D-Va.

The Post said others whose names were in the report included Reps. Norm Dicks, D-Wash., Marcy Kaptur, D-Ohio, C.W. Bill Young, R-Fla., and Todd Tiahrt, R-Kan.

The committee, however, has not announced an investigation of any of these lawmakers.

Waters is the No. 3 Democrat on the House Financial Services Committee and chairwoman of its subcommittee on housing. She has been an influential voice in the committee's work to overhaul financial regulations.

Waters came under scrutiny after former Treasury Department officials said she helped arrange a meeting between regulators and executives at OneUnited Bank last year without mentioning her husband's financial ties to the institution.

Her husband, Sidney Williams, holds at least $250,000 in the bank's stock and previously had served on its board. Waters' spokesman, Michael Levin, said Williams was no longer on the board when the meeting was arranged.

Waters has said the National Bankers Association, a trade group, requested the meeting. She defended her role in assisting minority-owned banks in the midst of the nation's financial meltdown and dismissed suggestions she used her influence to steer government aid to the bank.

"I am confident that as the investigation moves forward the panel will discover that there are no facts to support allegations that I have acted improperly," Waters said in a statement.

The committee unanimously voted to establish an investigative subcommittee to gather evidence and determine whether Waters violated standards of conduct.

The committee said it would investigate "alleged communications and activities with, or on behalf of, the National Bankers Association or OneUnited Bank" and "the benefit, if any, Rep. Waters or her husband received as a result."

The committee also voted unanimously to investigate whether Richardson violated House rules, its Code of Conduct or the Ethics in Government Act by failing to disclose property, income and liabilities on her financial disclosure forms.

The investigation also will determine whether Richardson received an impermissible gift or preferential treatment from a lender, "relating to the foreclosure, recission of the foreclosure sale or loan modification agreement" for her Sacramento, Calif., property.

Richardson said she has been subjected to "premature judgments, speculation and baseless distractions that will finally be addressed in a fair, unbiased, bipartisan evaluation of the facts."

"Like 4.3 million Americans in the last year who faced financial problems because of a personal crisis like a divorce, death in the family, unexpected job and living changes and an erroneous property sale, all of which I have experienced in the span of slightly over a year, I have worked to resolve a personal financial situation," she said in a statement.

The committee ended an investigation of Rep. Sam Graves, R-Mo., and released a report finding no ethical violations. It investigated whether Graves used his position on the House Small Business Committee to invite a longtime friend and business partner of his wife to testify at a committee hearing on the federal regulation of biodiesel and ethanol production.

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